Captains, Kings Go; People Take Over

It happened yesterday. One minute before 11 a.m., the Island boat line was administered by the officers and directors of the Massachusetts Steamship Lines Inc., as constituted for some time past; one minute after 11, the management was in the hands of new officers and directors, the responsibility of the New Bedford, Woods Hole, Martha’s Vineyard and Nantucket Steamboat Authority.

Today Francis X. Hurley and S. C. Luce Jr. are in New Bedford at the head of the line inaugurating the new era on the job.

Although the passing of control was pinpointed at 11 a.m., the meeting which executed the transfer began at 10 a.m. and did not end until 5:30 p.m. During that interval, one of the stacks of official documents and papers that went through the process of execution and changing hands, measured two and a half feet in height.

The time was not only one of incoming, but also of departure, for there and then occurred the recessional of the old owners and officers, Ralph Hornblower, Russell B. Stearns, George W. Waters, et al. The captains and the kings departed, and the people, as represented by the Authority, came in.

Passing of the Check

The big event, of course, was the passing of a check in the amount of $1,133,000 from the Authority to the old owners. But there was a lot that had to be done before and after, to make the new regime a reality.

When all was over, the boat line, so long threatened with dissolution and disaster, from the days of the New Haven ownership on, had become a corporation without stockholders, dedicated only to providing service, paying its way, and paying for new equipment. This may still seem enough of a task, but no longer does the line have to pay taxes, and no longer does it have to meet the demands of dividends for owners seeking a return on their investment.

Yesterday’s meeting was held at the First National Bank, and all the Authority members were present, Francis X. Hurley, chairman; S. C. Luce Jr., secretary and treasurer; Samuel Barnet, Lawrence Miller Jr., and C. Edward Hall. The legal representatives of the Authority, George M. Poland, general counsel, and Frederick H. Davis were on hand.

With the Authority group also were four men who will be closely concerned in the active management of the line, and its success, if success is to be realized: Capt. Winthrop B. Hodges, port captain; Benjamin F. Morton, traffic manager; Harold Fradipietro, personnel manager, and Lawrence Blatchford, purchasing agent.

All officers and directors of the company were present; Mr. Hornblower and Mr. Stearns, Frank B. Look, treasurer, who will be the assistant treasurer under the Authority, and George W. Waters, president. Samuel E. Gwynn of the firm of Choat, Hall and Stuart acted for the company.

The First Boston Corporation, purchasers of the bonds, and Hatden, Stone & Co., were represented by Clifford Walker and Frank Vaas of the firm of Ropes, Gray, Best, Coolidge and Rugg, Attorneys specializing in maritime matters were also on hand. The National Shawmut Bank, fiscal agents, were represented by this bank’s trust officer, and by attorneys, Storey, Thorndike, Palmer and Dodge.

Lots of Vice Presidents

The First Boston Corporation had a number of vice presidents and spare executives present, and Hayden Stone had vice presidents and assistant vice presidents.

Mr. Hurley and Mr. Luce had been in New York the previous day, signing the bonds by means of modern multiple-penned machines. The first business of yesterday’s meeting was adoption of necessary resolutions, including a formal termination of the old original agreement under which the Authority would have taken over the line last October but for technicalities requiring legislative action.

The company officially tendered all the outstanding capital stock, and individually, all the officers and directors resigned. Their posts were then filled by the election of Authority members - Mr. Hurley as president, Mr. Barnet as vice president, Captain Hodges as vice president, Mr. Luce as secretary and treasurer, and Frank B. Look as assistant treasurer of the company.

This administration of the corporation will last only until May 5, when the Massachusetts Steamship Lines Inc. will be liquidated. This method of procedure will redound to the advantage of the Authority. Meantime, all the Authority members are directors of the corporation. In due form the Authority voted to deliver the $4,100,000 in bonds to the First Boston Corporation, and they were duly handed over by official act. The First Boston Corporation then paid over the proceeds of the bonds, and the Authority paid off the old stockholders. The moment of recessional had come. The past walked out and the future remained.

The Authority then proceeded to set up its reserves and operating funds: $200,000 reserve fund; capital working fund of $200,000; reserve of $1,250,000 for a new boat; and a reserve of $665,00 for deferred maintenance and new construction. There is also a contingency reserve of $109,000 and an tem for expenses for engineering, financing and legal services of $112,000.

Of the payment due the company, $50,000 is held back to cover any unforeseen obligations.

Transfer of ownership also involved the pro-rating of payrolls and appropriate action in regard to other running accounts, the whole a pretty complicated procedure.